Craft Beer and the Buffalo Economy

Craft beer – beer produced by relatively small brewers who prize innovation, risk, quality over mass appeal – has exploded in Buffalo over the past five to 10 years. Buffalo tastes are slow to change – many here still prefer a trustworthy Molsons or Labatt’s over the latest offering from, say, Lord Hobo, or even a local brew from Flying Bison – but the craft movement has had an undeniable impact on the region. Craft beer has changed the way we spend (and invest) our money in Buffalo.

It seems like every week a new brewery or craft beer bar opens up. That isn’t true, of course, but Buffalo does boast over 20 breweries, many of them just over a year old man many younger, and most bars now offer a few craft taps. (Even our gas stations offer growler fills.) Although we don’t normally think about economics when we’re admiring the mouthfeel of the latest Stone “Enjoy By,” it is safe to say that craft beer has changed the way we, as individuals and as a community, spend (and invest) our money.

Because of that, we decided to ask six leaders in the local craft beer industry – people who helped bring craft beer to Buffalo, and keep it available, fresh, and (relatively) affordable – to offer their insights into the ways their passion and their business have transformed the local economy. Their answers were both subtle and profound. Our panelists are:

The Brewer: Ethan Cox, Founder and President of Community Beer Works

Neighborhood development is another area where we see again generally a beneficial impact. So much so, in fact, that a Buffalo based urban planner is associated with coining the very term “Beer Oriented Development.”

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The Retailer: Brian Nelson, Manager of the Village Beer Merchant

Retailing craft beer is a tough thing. The margins suck and the hours are long. But we bring the neighborhoods fresh beer on a daily basis. Providing that beer, watching the Buffalo brewing and drinking culture mature, and talking about new beers every week with the customers we’ve gotten to know over the past decade — these things make it all worthwhile.

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The Distributor: Dan Robinson, Head of Craft Beer at Try-It Distributors

The big bad wolf has purchased many prominent breweries, including Goose Island, Elysian, and most recently, Wicked Weed. Social Media blows up to the point of boycotting these great brands, all because their paychecks are sent from a different corporation. However, what if you thought about these transactions from a financial standpoint? These items are more widely available now due to the resources and distribution networks that large breweries have at their disposal.  From many accounts, the beer is the exact same or even better when these small brewers get bought out.  So, does this help our lovely Craft Beer Industry, or hurt it?

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The Restaurateur: Mike Shatzel, owner of the Shatzel Group restaurants (including Thin Man Brewery)

The proven success demonstrated at Coles, Pizza Plant, Mr. Goodbar, Alternative Ales, and Colter Bay soon led to many bars add draft lines around town. With this came higher sales which led to higher tips and the trend continued from there. Stores like Premier Gourmet & Consumers success led to locations like Village Beer Merchant, Aurora Beer Works & the new Brewed & Bottled in Lewiston that specialize on craft beer. The big chain stores like Wegmans, Tops, 711, and Wilson Farms had to add major craft beer areas in order to maintain market share.

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Click here to meet some of the panelists before you read their thoughts on beer in Buffalo.

The Home Brew and Bar Supplier: Tom McManus, CEO of KegWorks

It’s going to get ugly for the macros. They are getting squeezed from both sides. Craft is growing a percentage of total beer sales but what no one is talking about is that beer as an overall category is shrinking.  There are a lot of things working against beer right now. Changing drinking styles of the millennials as this group ages up, wine seeing a resurgence, all people becoming more health conscious — and don’t forget about cannabis.

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The Attorney: Dan Moar, Co-Chair of the Brewery and Distillery Law Practice Group at Goldberg Segalla

A craft brewery, or any new business, has limited financing and wants to focus on barley, hops, fermentation tanks, kegs, social media, t-shirts — pretty much anything other than an attorney. Until recently, attorneys were also less than hospitable — coming up with unrealistic rates, providing little or no guidance on what services are most significant on a limited budget, and viewing the industry as a trend with limited upside.

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More Craft Beer Content:

 

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Content for the July 2017 issue, Craft Beer and the Buffalo Economy, presented by Waterbourne Group of Companies, LLC.

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